avoid foreclosure – Is Now The Time To Go Back Into Real Estate? by Chris Seabury
November 17th, 2009 | by admin |Over the last two years real estate prices have been collapsing at an incredible rate. As many struggle to maintain their credit ratings and work to climb out from underneath the high amounts of debt that they have accumulated as a result of taking second mortgages, home equity loans, sub prime mortgages as well other forms of debt. Now with mortgage rates at some of the lowest levels in history many are wondering if now is the time to go back into real estate. The real estate markets trade in one of four cycles which include: expansion, equilibrium, decline, and absorption. At present the markets are switching from a cycle of decline to one of absorption fueled in part by historically low mortgage rates, favorable FHA financing terms and many long term investors seeking great long term investment opportunities that have presented themselves.
As far as the residential real estate market is concerned, many of the once hot housing markets are down significantly from where prices were in 2006. For first time homebuyers, this along with favorable mortgage rates and refinancing is leading to absorption of some of the unsold homes at very favorable mortgage loan rates. Over the long term those who are purchasing in these markets will see significant price increases once the market conditions return to normal. Especially when you consider the fact that real estate prices have averaged to about 8.6% a year since the end of World War II. In the medium term the incentives from Washington which includes: an $8,000.00 credit for first time homebuyer and the efforts to remove those bad credit mortgages off the books of many of the financial institutions should lead to a stabilization in mortgage rates and an increase in the overall amount of lending that will be taking place by the various financial institutions. While this is encouraging there have been historical examples of when this massive type of action by the government action has lead to a bottoming in real estate prices some good examples of this include: 1933. During the very depths of the Great Depression real estate prices were falling at an even faster levels than they are today. With the passage of the New Deal legislation it created the first ever government agency to help people be able to avoid foreclosure and stay in their homes called the Federal Housing Administration (FHA). In just a few short years the FHA would be instrumental in bringing an end to the overall real estate and mortgage mess that country was in at the time.
Commercial real estate on the other hand will be slower to recover than residential the reason being is the demand for this particular type of real estate tends to lag behind what is happening on the residential side. Part of the reason is that many businesses often wait for the economy to have made a full recovery before they even consider looking at purchasing any commercial property or thinking about contacting lenders about purchasing a particular piece of property. Even though prices could continue to face many challenges over the short term, the medium term is looking like the market conditions are on the verge of switching into absorption. This means that over the course of several years the excess inventory should work its way off the market. In the long term, those investors who are making investments in this type of real estate will be rewarded handsomely. A good example of this situation occurred in 1982. With one of the most severe recessions that the country has seen since the Great Depression commercial real estate at the time was doing just terrible with vacancies up and excess inventories hanging over the market. Over the next five years prices bottomed then started steadily improving with real estate prices in many cities hitting all time highs at the time in 1987.
In spite of what many are hearing, the real estate market is starting to show signs of absorbing the excess inventory that is out there. Some of this is being fueled by low mortgage interest rates, favorable investment conditions for speculators as well as first time home buyers and the ability to refinance at some of the best loan rates in many years. While these positives will play a role in helping turn the market conditions around the fact of the matter is that it will take time for the markets to finish absorbing the excess supply to create stable conditions once again. Those who have been aggressively buying during these challenging conditions that are willing to take a long term focus will be rewarded for their patience and foresight by taking advantage of the weakness in the current market conditions while others are fearful.
For Mortgage Calculators and instructional info go to http://www.interest-rate-site.com for complete info.
About The Author
Chris Seabury
I am an educational and informative writer dedicated to educating and keeping you up to date on the latest changes that are happening in the areas of real estate, finance, mortgages and so much more. Offering you a variety of tips as well as tactics to help you find the lowest mortgage rates, home equity loans, reverse mortgages, mortgage companies, commercial mortgages, amortization and second mortgages. Using our wide variety of tools such as the mortgage calculators, interest calculator, interest rate calculator, mortgage quote information and more can help you to avoid going into those bad mortgages that you hear about, instead finding those mortgages that make the most sense for you financially. In addition we offer real time mortgage news, commentary, analysis and a wide variety of educational materials to help you have a greater understand of how the mortgage markets, real estate markets and interest rates can effect you, so that you can be able to avoid the common mistakes that countless numbers of people have made over the years and make sound investment decisions. Go to my website http://www.interest-rate-site.com for complete info.
Back with more news for you today. It’s amazing how much good information there is on this stuff out there if you know where to look. Three in particular that I found really valuable were…
Hey Elliot! Ways To Avoid Foreclosure
MARYLAND HEIGHTS, MO (KTVI – FOX2now.com) – Are you finding yourself cash-strapped these days and need help staying in your home? With new incentives from … Read More…
Home Loan Modification – Stop Foreclosure and Modify your Mortgage
Mortgage loan modification can be a great way to avoid foreclosures, if you're in debt, and don't earn enough money to pay your monthly loan installments to … Read More…
… mortgage payments, please know there options available to you to help you keep the home as well as some strategies to help you avoid foreclosure. … Read More…
That’s all the news for today guys, so until next time, thanks for stopping by.
Our house is in foreclosure. can we rent it from the bank that bought it. we are in michigan?
no, they will only sell it.
